The bank tends to cut its rate when it wants to stimulate the economy, and hikes it when it wants to slow down an overheated one.

"Growth during the first half of 2019 is now expected to be slower than was anticipated in January," which is why the bank is keeping its rate low, to help stimulate the economy, it said.

In January, the bank was expecting Canada's economy to grow by 1.7 per cent this year. On Wednesday, it downgraded that lukewarm forecast to a chillier 1.2 per cent.

Bank of Canada governor Stephen Poloz did add, however, that the bank expects the latter half of the year to be better than the first.

"Right now, we believe that this setting of interest rates will give us the outlook that ... growth picks up in the second quarter, and picks up for real in the third quarter for the second half of the year," he said.

Nonetheless, an economy that's on track to grow by less than the current inflation rate is a recipe for low rates, which is why "an accommodative policy interest rate continues to be warranted," the bank said.The central bank's rate impacts Canadians by influencing the rates that retail banks give to savers and borrowers on products like mortgages and savings accounts.

"Anyone with a variable rate mortgage should be pleased with this announcement because it diminishes the timing and likelihood of any increase to the prime rate," said James Laird, co-founder of Ratehub Inc. and president of mortgage brokerage CanWise Financial.

"This announcement also provides some pressure relief to those considering entering the housing market, as they should expect fixed rates to remain stable through the spring and summer homebuying season," Laird added.

"The bank's pivot away from its hiking bias was sharper than expected today, leaving the Canadian dollar trading weaker and yields lower on the day," CIBC economist Royce Mendes said.

Trading in investments known as overnight index swaps imply there's now zero chance of a rate hike this year. Traders think there's about a 10 per cent chance of a cut as early as next month, and by September those odds jump to more than one in three.​Economist Stephen Brown with Capital Economics said "although the bank's tone might therefore become more positive at the next couple of meetings if the data come in better than officials expect, we still think the bank's next move will be to cut interest rates, in the second half of the year."Andrew Kelvin, senior rates strategist at TD Bank, said he also thinks the bank is done with rate hikes. "This just sounds like a central bank that is coming to grips with the fact that 1.75 per cent will be the top of this policy cycle," he said.